Taking their sweet time

Also Interesting

• Asset allocation outlook
• 7-Year Asset Class Real Return Forecasts
• Multi-Asset Solutions Weekly Strategy Report

There is a feel good factor around much of the global economy. Forecasters have been rushing to upgrade growth expectations, with 2018 pencilled in to be the best year since 2011. However, expectations around monetary policy seem to have shifted less. While market interest rates have been rising, the pricing embedded in these still suggests relatively cautious adjustments in policy over coming years. Perhaps the best example might be the US where, in spite of strong growth and looming fiscal stimulus, markets are still only expecting a little more than three rate hikes over the next two years. In many other developed markets even less is priced. Should markets expect central banks to withdraw the punchbowl more quickly amid a cyclical upswing?